One-eyed-Jim Posted September 25, 2018 Share Posted September 25, 2018 Never having thoughts of returning to the UK, between us we have quite a bit of capital tied up in assurances-vies, all over 8 years old.Now we are almost certainly returning owing to a family situation. Ideally would like to cash in the assurances, use what we need to and later hopefully have some left over to reinvest in ISAs or TESSAs or whatever is the current UK preferred option.Is this going to incur all sorts of cashing-in penalties? Answers in words of one syllable please as my head is spinning a bit at present!Thanks in advanceJim Link to comment Share on other sites More sharing options...
YCCMB Posted September 25, 2018 Share Posted September 25, 2018 This seems to explain very succinctly:"[Article updated February 2018] I can decide at any time to close my life insurance policy. What to have ...Life insurance does not include a commitment period, in short, so I am free to terminate my contract at any time by proceeding to the full redemption. However, the taxation applied varies according to the duration of the contract.Respect the terms of my contractWhen I want to terminate the contract, it is necessary to make a total surrender subject to taxation. There is no withdrawal form but a request for redemption. In addition, the redemption can be partial ... I specify that I want to make the total surrender of my contract: it means that I want to collect all of my savings. The redemption request should also specify the tax regime to be used.Do not pay attention to the applied taxationI expose myself to a somewhat heavier tax if I close my life insurance too early. Under four years, the law provides for a flat-rate discharge of 35%, plus social security contributions. Between the ages of 4 and 8, the flat-rate levy is 15%. From the eighth year, taxation becomes advantageous. My life insurance policy is then taxed by reinstatement in taxable income, or by flat-rate discharge of 7.5%, after a reduction of € 9,200 if I live in a couple or € 4,600 if I live alone.Neglecting the life annuityWhen closing my life insurance, I can choose how I want to recover my savings. The most common solution is to opt for an exit, but it is also possible to collect this capital in the form of a life annuity. I renounce the capital, in exchange my insurer pays me a pension for life. Note that this pension is taxed according to my age: 70% if I am under 50, 50% up to 59 years, 40% up to 69 years and 30% from 70 years."Taken from https://www.hellolife.fr/article/cloturer-mon-assurance-vie-4-erreurs-a-ne-pas-commettre_a10479/1I've then put it through Google translate.I accept no responsibility for the quality or the content of the Google translation, except to say I've read it in both languages and it seems fairly OK as translations go. Link to comment Share on other sites More sharing options...
Judith Posted September 26, 2018 Share Posted September 26, 2018 Thank you Betty, I might need that at some stage in the next part of my life too. It is roughly as I understood it too. I cashed in a very small AV recently which was not performing well one year before its 8 yr anniversary, so I shall be taxed on it, but since it paid only c1000€ in total, I decided to get rid of it ... I have others performing much better and they have all been held for over 8 years now, so that should be OK! Link to comment Share on other sites More sharing options...
One-eyed-Jim Posted September 26, 2018 Author Share Posted September 26, 2018 Thanks for that - I understand the 7.5% business and also gather that the cash accruing would be handed over to us already net of the appropriate deductions. But what about any risk of social contribution charges? i ask this as they seem to crop up everywhere you least expect........Jim Link to comment Share on other sites More sharing options...
YCCMB Posted September 26, 2018 Share Posted September 26, 2018 Jim, it says above "plus social contributions", so I guess there will be some.ETA: this piece explains that indeed there's 17.5% social contributions to pay. I can't provide the translation. The article exceeds the character limit for google translate. I'm sure you can find another way to translate it if you need to.http://www.epargneactuelle.com/produits-afer/fiscalite-assurance-vie/imposition-rachat-assurance-vie.html Link to comment Share on other sites More sharing options...
One-eyed-Jim Posted September 28, 2018 Author Share Posted September 28, 2018 Yes, I get it now. Thanks for all that -really helpful. Link to comment Share on other sites More sharing options...
parsnips Posted October 1, 2018 Share Posted October 1, 2018 Hi, Once you become non-resident in France and retain your french assurance vie policies, , any withdrawals are exempt from french CSG . If held for over 8 years the gains included in a withdrawal are subject to 7.5% french income tax , which I beleieve could be set against any UK tax due.(Ask HMRC) see here;ghttp://www.patrimea.com/fr/blog/2018/04/12/assurance-vie-et-non-resident-fiscalite-2018-sur-les-retraits. See also this on UK tax treatment; (note; your french assurance provider will notify you of the declarable gain on a withdrawal). https://www.gov.uk/government/publications/gains-on-foreign-life-insurance-policies-hs321-self-assessment-helpsheet/hs321-gains-on-foreign-life-insurance-policies-2015 Link to comment Share on other sites More sharing options...
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